Friday, 24 December 2010

Corporate Responsibility from an Irish Bank

The Irish government has just poured another €3.7 billion into one of the country's largest bank - Allied Irish Banks (AIB). The move effectively nationalizes the institution. The government now owns four out of six of the country's largest banks.

The Irish government took over AIB because it was close to having insufficient capital to cover its appalling losses. Without additional funding from the government, AIB risked breaking the rules governing its banking licence.

The Irish banking system is unrelenting financial disaster. It has imposed upon the Irish taxpayers horrific losses, that will take generations to pay off. So with those devastating losses in mind, I checked out AIB's corporate social responsibility website. Here is taster of the site's contents:

Being a responsible corporate citizen is very important to AIB, wherever we operate. We place the core values of honesty, integrity and fairness at the centre of our relationship with our customers and stakeholders. Our CSR practices support these values and we aim to follow best industry practices.

We have a long term commitment to CSR and look forward to the challenges and opportunities it presents for our staff, customers, shareholders, business partners and the communities in which we operate.

The site defies parody.

All the weasel words that have infected modern business practices are there:, integrity, values, fairness, relationship, stakeholders. There is even a page on the environment. Yet here is bank whose business decisions wrecked an economy, improvished a people, and rendered their government insolvent.

What should have been the true corporate social responsibility of AIB? It was to be a prudent and well run bank - no more, no less.

There was no need to mouth empty platitudes about a "committment" to "honesty". AIB would have discharged its social responsibilities fully if it had extended loans to viable businesses, given mortgages to credit worthy individuals, paid its taxes fully, and made a profit for its shareholders.

"It has imposed upon the Irish taxpayers horrific losses, that will take generations to pay off." Nah, it didn't "impose" them. The Republic's elected government chose to assume those losses for the state. Arseholes, ignoramuses, crooks and dimwits, no doubt, but that's democracy for you. Especially a democracy where you vote largely according to which bunch of murderers your family supported during the Civil War after independence.